Foreign Currency Ponzi Scheme in North Carolina

North Carolina Man to Spend 50 Years in Prison for $40M Foreign Currency
Ponzi Scheme

The
Ponzi scheme “mastermind” behind a particularly nefarious $40 million,
foreign currency investment fraud scheme has been sentenced to 50 years
in prison and ordered to pay $35,331,632 in restitution, according to
the U.S. Attorney’s Office.

Keith Franklin Simmons, of West Jefferson, North Carolina, was charged
with one count of securities fraud, one count of wire fraud, and two counts
of money laundering in Aug. 2010. He received his sentence in federal
court on May 23.

“What makes this case particularly troubling is that from the beginning,
this defendant had no intention of investing a single dime of the victims’
money,” said U.S. Attorney Tompkins in a May 23 press release. “Simmons
made slick presentations to his victims about lucrative investment returns
that were filled with lies and deceit. … The impact of Simmons’
fraud has been devastating to his victims, who trusted him with their
hard-earned money.”

In an effort to prevent similar schemes, Tompkins added a warning: “I
want to caution potential investors before they turn over their life’s
investments to pay close attention to sales pitches that promise large
returns on investments. If it sounds too good to be true, it probably
is.”

According to court documents, Simmons began soliciting investments in Black
Diamond – an opportunity he said was generating profits of more
than 48 percent per year – as early as April 2007. The 400 investors
lured into the scheme were told their funds would be used for trading
in the foreign currency market.

The investment scheme lasted for over two years, but none of the investors’
funds were ever invested in any foreign currency market. Instead, Simmons
used the money to pay for his lavish lifestyle.

When handing down the sentence, U.S. District Judge Robert J. Conrad, Jr.
said: “The court could not help being struck by the devastation
suffered by the victims in this case … A 50-year sentence is an
enormous sentence, but there seems to be no other sentence … that
would accomplish justice in this case.”

For additional information, click
here to read the full U.S. Attorney’s Office press release.